Zaner Daily Precious Metals Commentary
Thursday, May 8, 2025Gold remains defensive on trade optimism
OUTSIDE MARKET DEVELOPMENTS: News of a "full and comprehensive" trade deal with the UK has stoked optimism that other deals may soon drop. The easing of trade tensions is stoking risk appetite. The fact that China and the U.S. will begin
To be fair, a trade deal with the UK was the easy one. The U.S. typically runs a trade surplus with the UK (+$11.9 bln in 2024). Striking a deal with China will be far more difficult, but that talks are beginning is encouraging.
The EU is seeking public comment on $109 bln in retaliatory tariffs if ongoing negotiations fail to bear fruit. “Since the US imposed its unjustified and harmful tariffs, the EU has prioritized finding a mutually beneficial and balanced solution through negotiations,” the EU said in a statement.
This chart from Bloomberg, which was included in the World Gold Council's latest commentary, shows the unprecedented level of trade policy uncertainty.
In a widely anticipated move, the Bank of England cut the bank rate by 25 bps to 4.25%. Amid ongoing uncertainty, MPC members had mixed views, with two members voting for a 50 bps cut and two favoring steady policy.
"Uncertainty surrounding global trade policies has intensified since the imposition of tariffs by the United States and the measures taken in response by some of its trading partners. There has subsequently been volatility in financial markets, and market-implied policy rates have moved lower. Prospects for global growth have weakened as a result of this uncertainty and new tariff announcements, although the negative impacts on UK growth and inflation are likely to be smaller." – Bank of England Monetary Policy Report
Meanwhile, Sweden's Riksbank and Norway's Norges Bank left rates unchanged. Both cited global trade uncertainty and expressed dovish leanings.
The Fed remained on pause when policy was announced yesterday. Chairman Powell acknowledged that solid economic fundamentals allow the Fed to continue playing the waiting game.
“The labor market is solid, inflation is low. We can afford to be patient as things unfold. There’s no real cost to our waiting at this point,” Powell said during his presser. President Trump called him a "fool" this morning on TruthSocial.
Q1 Productivity (preliminary) fell 0.8% on expectations of -0.6%, versus a revised +1.7% in Q4 (was +1.5%). ULC surged 5.7%, above expectations of +5.2%, versus a revised +2.0% in Q4 (was +2.2%).
Initial Jobless Claims fell 13k to 228k in the week ended 03-May, below expectations of 233k, versus 241k in the previous week. Continuing jobless claims fell 29k to 1879k in the 26-Apr week, versus a revised 1,908k in the previous week.
Wholesale Sales rose 0.6% in March, below expectations of +0.9%, versus a negative revised +2.0% in February (was +2.4%). Inventories rose 0.4% on expectations of +0.5%, versus a revised +0.5% in February (was +0.3%).
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$22.45 (-0.67%)
5-Day Change: +$115.14 (+3.56%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +47.31
Gold is trading lower for a second session after failing to sustain gains above $3,400 earlier in the week. Easing global trade jitters and a modestly firmer dollar are weighing on the yellow metal.
This week's powerful rebound stalled at the 78.6% retracement level yesterday. The subsequent retreat into the range suggests a period of consolidation is likely, but the dominant trend remains decisively bullish.
The World Gold Council cited "a significantly weaker US dollar and overall heightened risk" for driving gold to record highs in April. The WGC expects "US policy and structural risks to continue driving gold investment" moving forward. They acknowledge that "profit taking could bring pause but may also encourage consumers."

The WGC also noted strong ETF inflows as a driving force. "In Q1, gold ETFs amassed US$21bn of inflows – the strongest quarter in three years – with an additional US$11bn in April," the organization reported.
Despite the longer-term bullish prospects, today's breach of support at $3,318.27/11.82 (halfway back point of the recent rally, and 20-day MA) suggests scope for additional retracement towards $3,300. The 61.8% retracement level of the rally from $3,204.91 to $3,431.63 comes in a $3,291.52.
A rebound above intraday resistance at $3,365.93 would set a more favorable short-term tone, suggesting potential for renewed probes above $3,400.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.025 (-0.08%)
5-Day Change: -$0.005 (-0.02%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +13.21
Silver is trading within yesterday's range. While trade optimism provides some underpinning, weakness in gold and a firmer dollar weigh.
The 50- and 20-day moving averages have converged at $32.690/698, and today's close in relation to those indicators could be telling. A close above would favor more tests above $33, while a close below would leave the white metal vulnerable to tests below $32.
It seems likely that a move back above $33 would invite further selling interest, leaving the 25-Apr high at $33.662 protected.
On the downside, Monday's low at $32.009 stands in front of the 100-day moving average at $31.793. Below the latter, the $31.195/114 level (200-day MA, halfway back point of the rally from $28.565) would be in play.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com
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